Tesla Forms RAV4 Partnership With Toyota

NEW YORK ( TheStreet) -- Tesla ( TSLA) announced today that it and Toyota ( TM) have signed an agreement to begin developing an electric version of Toyota's RAV4.

Toyota's president Akio Toyoda and Tesla CEO Elon Musk announced their intention to pursue this partnership in May. The companies are aiming to market this electric vehicle in the U.S. by 2012.

Prototypes will be made combining the Toyota RAV4 model with a Tesla electric powertrain. Tesla plans to produce and deliver a fleet of prototypes to Toyota for evaluation within this year. The first prototype has been built and is now undergoing testing.

Tesla has indicated that it seeks to learn and benefit from Toyota's engineering, manufacturing and production expertise, while Toyota aims to learn from Tesla's EV technology and "daring spirit."

Although many investors have been critical about the lack of products Tesla has on the market, some argue that Friday's announcement is an example of how the electric carmaker may have many more cards up its sleeve. Earlier this week, Bloomberg reported that Tesla will have two rechargeable electric auto prototypes ready for Toyota this month as a first step in their partnership.

Currently, Tesla, which became public on Jun. 29 and has yet to book a profit, has only one car on the market: the high-end, electric Roadster sports car, which thus far has appeared to be more popular among A-list celebrities than anyone else. The carmaker expects to have its more affordable Model S vehicle on the market by 2012, though it currently has only one prototype and a lack of production facilities available for the car.

Tesla stock has risen 4% to $20.68 while Toyota stock has fallen 1.4% to $71.38.

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